European retail industry body Eurocommerce called on European Union institutions and member states to resolve the Red Sea crisis that has disrupted trade, saying in a letter to Belgium’s foreign minister that it has already had “massive impacts” on businesses.
In order to avoid Houthi strikes, which have increased since early December, shipping companies have rerouted container ships away from the Red Sea. This has caused supply chains for businesses that depend on the Suez Canal to transport goods from Asia to Europe to be disrupted. Fashion retailers including M&S, H&M, Inditex, and Primark are among the members of Eurocommerce.
“The longer carriers are forced to reroute, the more businesses, and ultimately consumers, will suffer from additional costs adding to the already high costs of living in Europe,” Eurocommerce said in the letter.
Because the alternate shipping route around Africa’s southern coast takes 2-3 weeks longer and results in higher fuel and labour charges, retailers that source from manufacturers in China and South-East Asia have experienced delays and cost increases.
Fears have been raised by this interruption that Europe’s inflation may take longer to abate, just when consumers on a tight budget were hoping that food and clothing prices would start to decline.
The group said it supports EU initiatives that aim to protect commercial ships and seafarers against attacks. The EU is set to launch a joint Red Sea naval mission this month.
